CURRENCIES

Published: October 17, 2000

Euro bears pushed the common currency down yesterday to a level just above its low against the dollar, emboldened after Europe's chief central banker made comments that appeared to play down chances of further market intervention.

In an interview with The Times of London, the president of the European Central Bank, Wim Duisenberg, was quoted as saying that it would be inappropriate for the central bank or the Group of 7 leading industrial nations to support the currency in times of market turmoil caused by external events, like a war in the Middle East.

Traders said the remarks, just three weeks after a joint intervention in the currency markets to bolster the ailing euro, provided yet another reason to sell the unpopular currency.

In New York, the euro settled late yesterday at 85.05 cents, down from 85.44 cents on Friday. The euro reached an end-of-session low of 84.72 cents in New York on Sept. 20.

''We saw euro sellers start to come out in force late last week as U.S. equity markets and oil stabilized a little,'' said John McCarthy, senior vice president at ING Barings Capital Markets. ''Today, the market construed Duisenberg's latest comments as a license to sell.''

Dennis Heidt, chief dealer at BNP Paribas in New York, said: ''The market is very nervous. We've reached some critical levels in the euro on the support side,'' adding that thin trading was exaggerating speculative market moves.

A flurry of comments from European officials also lent some late-day support.

A European Central Bank executive board member, Sirkka Hamalainen, said in Dublin that policy makers were concerned that the weak euro posed a potential risk to the world economy.

France's finance minister, Laurent Fabius, attending a euro group meeting in Luxembourg, said euro zone central bankers and finance ministers agreed that the equilibrium value of the euro should be markedly higher than its current trading level.

Earlier, the president of the Bundesbank, Ernst Welteke, also kept the idea of intervention in circulation, telling journalists that currency market interventions are a tool of every central bank.

Graph: ''CURRENCIES'' tracks the Euro to the dollar, since May 1999. (Source: Bloomberg Financial Markets). It also shows yesterday's closes for the British pound (in U.S. dollars), the Canadian dollar (per U.S. dollar), the German mark (per U.S. dollar), the Japanese yen (per U.S. dollar), the Mexican peso (pers U.S. dollar), and the South Korean won (per U.S. dollar).